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1. Does it make more sense to do the Closing on the month-end to aviod current month's interest? So if a deal is closed on 5th day, then the Buyer have to count for 25 days of interest, if the deal is closed on 28th day of the month, then the Buyer has to just count for 2 days of interest.... one of the BOA Mortgage Agents told me something like this when I was shopping for mortgage...
2. Also when does the first Mortgage payment start? Is it the following month or 2 months from the Closing month?
1) Eh, its a tiny amount in the long run, not worth the effort. Its enough of a headache getting everything signed off on to worry about it. You own the house when you close, so yes, you'll have interest over the course of time that you own it. Its a moot point if you ask me.
2) Think of it as the opposite of renting. Renting, you pay in the beginning of the month, paying for the next 30 days. With a mortgage, its like living in it and paying after. So you make your first payment at closing, and you then don't pay for that month, but the next - so effectively two months.
1) Eh, its a tiny amount in the long run, not worth the effort. Its enough of a headache getting everything signed off on to worry about it. You own the house when you close, so yes, you'll have interest over the course of time that you own it. Its a moot point if you ask me.
2) Think of it as the opposite of renting. Renting, you pay in the beginning of the month, paying for the next 30 days. With a mortgage, its like living in it and paying after. So you make your first payment at closing, and you then don't pay for that month, but the next - so effectively two months.
i would just add for #1 - you'll have to pony up the interest monies at closing, so if you're cash strapped, try to close at the end of the month, as you'll only have to pay a few days. if you close on April 2nd, for instance, you have to pay interest from the 2nd to the 30th. if you close on the 30th, you just have to pay for that day.
#2 - for instance....you close april 2nd - your first payment is due June 1st (since you paid for april at closing and your june 1st payment covers May). closing on april 30th yields same first payment date, btw.
it's all the same in the long run. Pay more days of per diem interest at closing, you will have a longer period until closing. Close at the end of the month, sure, you get in cheaper, but your first payment is due sooner
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